Thanks chaps.
Sorry to throw a
load of more questions your way
but here goes...........
The trading arcades article in the traderpedia states -
The most common model for a trading arcade is a trading room where a trader can lease a seat, trade for his own account at reduced commissions, and often split the profits with the house in return for additional funding.
A "seat charge", which can range from $1,000 to $6,000 per month, includes some combination of market data, analytic package, connectivity and order routing technology. The most common offering is a high performance order entry system with sophisticated trading tools, market data and news services.
Arcades often will offer an individual trader some degree of leverage based on how much he deposits of his own money and how much profit he is willing to give up. Typical new traders deposit $10,000 and get an additional $50,000 in margin in exchange for a 50/50 profit split for a two-year lock-in deal. More experienced traders may be able to negotiate up to 70% of profits with no funds on deposit.
Parky -
What would the trading arcade look for in a backed trader? In a word profit, they are looking for someone who will make them money be it from commission or profit split. Ideally they want high volume high profit traders, but they also want the steady traders with medium volume, medium profit as these will be the traders that stay with them for long periods. Age is really academic as is educational qualifications.
It's good to hear that arcades do/may not discriminate based on age and education. Logically, profit is the key and this doesn't relate to d.o.b. or university attended..........
However, I've looked through the T2W traderpedia index of trading arcades. Many of these organisations state that they are proprietary trading groups on their websites. So the boundary between a trading arcade and a proprietary trading firm can seem blurred.
Also, many of these companies state that they are looking for fresh graduates to train and then back financially. Other firms will also consider experienced proprietary or futures traders seeking financial backing.
With all this in mind, why do many prop firms only deal employ fresh graduates, preferring those applicants with little or no prior trading experience?
It's also good to hear that the arcade may also not want to enforce their preferred trading style/timeframes on the trader. Is it likely that funded fresh traders would have a lesser say on the trading style to be used- at least initially, until they gained experience and proved their worth?
Does the arcade also allow the trader to choose their own market and instrument to trade, or are traders pushed towards certain markets/instruments?
It's quite scary to think what could be achieved with upto £50,000 in margin to play with
.
Is this kind of deal typical for partially funded traders?
Or, can the additional margin put forward by the arcade, on top of the traders $10,000 input, be much less than $50,000?
Is it generally agrees that if you lose the arcades $50,000 - they would keep your $10,000? how does this aspect tend to be managed?
Can traders commence trading at their own chosen position size, or does the arcade control their progression in volume as and when they progress?
How would a trader with some successful home based intraday trading experience under their belt, and a comprehensive understanding of TA and financial markets, approach an arcade with a view to being partially or fully funded by the arcade?
What would the arcade want to see as proof of skills and performance etc. and what would they look for in the candidate?
How much experience is needed in order to be considered and "experienced trader" - 6 months? 1 year? or longer?
Does a large part of being selectable it involve presenting an effective business plan to the arcade, about how you would plan to trade and profit?
What backgrounds and experience do the non-graduate past or present trainees fully or partially financially backed traders, that you know of at your own trading arcade/s have?
Even for the non-graduates, have they typically initially had to have in house training to learn the arcades preferred method of trading?
Are experienced traders typically allowed to get on with using their own tried and trusted trading methods/strategies?
How often do traders split profits with the arcade?
Does this tend to be monthly, quarterly, deducted from the original account balance?
Or, can the trader fully manage their own account - i.e. determine how much margin they want to maintain and increase to, volumes traded, and how often or at what account balance they will split their profits with the arcade?
Or, to increase margin, does the trader need to ask for more funding?
Parky -
First answer is yes and no. The result is the same, you being backed by the company that takes you on but trading arcades are not the same thing as prop houses. Some prop houses have their own offices but a trading arcade will facilitate backed traders, brokers and can have several prop units all contained on the same trading floor.
Does this mean that a trading arcade is a bigger operation than a prop house, and that essentially a prop-house/firm is often just a relatively small group/team of traders?
Many thanks once again
jtrader.